We first heard Andrew Farbman, CEO of the Farbman Group, speak about technology and the evolving role of the broker, at the NAI Leadership Summit in Orlando. In an exclusive guest post for the CompStak Blog, Andrew explains why he believes the CRE industry should embrace technology in times of change.
Change can be difficult in any industry—and the CRE industry is no different. Some brokers fear that technology will eventually replace them, so they avoid technological advances and limit their use of it. Others believe, as the old adage goes, that ‘knowledge is power’ and correlate their personal value with the knowledge and experience they possess. Regardless of the reasons, as tenants and landlords increasingly utilize technology resources, they require the same from us and it’s time that the industry adapt.
The evolving role of the broker
As the CEO of the Farbman Group, I not only manage our brokerage business, but also interact with brokers as an institutional landlord. My experiences continually reinforce my belief that the role of the commercial real estate broker is rapidly evolving. Today, brokers serve more as consultants than deal negotiators. And, as a consultant, the broker is asked to incorporate technology into the process in order to gain full market knowledge and a broad perspective expected from a trusted consultant.
Tenants are increasingly asking brokers to evaluate a myriad of factors, including the efficiency of the space, the history of ownership, and more—making negotiations more complex than ever. Tenants are also more informed than ever before, and, as a result, brokers have to utilize technology to remain several steps ahead.
On the brokerage side, retail tenants expect us to use geographic and demographic data to help with site selection and expansion. Our marketing department can help brokers layer government census data on top of mapping information, and while local broker knowledge—such as which way the traffic is flowing and which side of the street is better—is irreplaceable, I definitely see the need for a system that will automatically collect and display data with less manual assembly.
On the landlord side, when agents pitch their services, clients increasingly want to see them using the proper technology to market the space. Today, the more exposure a space has, the better the chance of success. If you can’t show your landlord clients that you have the capability to maximize their property exposure, you’re not likely to be hired.
Brokers also need to access technology on the go. A few years ago, the idea of CoStar on mobile devices was an interesting new proposition. Today, having mobile access to building, listings and deal information is no longer an advantage—it is a requirement. In our own buildings, we are making sure that vacancies, floor plans, and real time reports are available on mobile devices through applications like iTenant.
Technology as a tool, not a weapon
In 2000, on my first day on the job, I’ll never forget agents coming to me holding crumpled pieces of paper with information about their clients, stating that this is why they are vital.
I was able to get the same information by working on my computer for 10 minutes.
Whereas many brokers fear technology will replace them, I personally believe the opposite: If you don’t embrace technology, you will be replaced. I still see brokers using hard copies of presentations and flyers, which are not conducive to quick sharing online. Systems such as RCM (Real Capital Markets) prove that those who can’t share quickly become extinct.
This doesn’t change the fact that, even with technology, the majority of business comes from personal touches: someone canvassing, making a call, meeting with a prospect, etc. Personal relationships will never be replaced, nor will the intellect and intimate knowledge of brokers. However, as a complementary tool, technology has a place in our industry and allows brokers to evaluate situations on the fly and provide the best possible analysis quickly and efficiently.
What can the leaders of the CRE industry do to encourage the brokers to be more open to technology?
In order to help brokers embrace and become more open to the benefits of technology, they must understand that they should not be reluctant to share information. While many brokers believe that keeping information private provides a competitive advantage, the reality is that it’s not having the data that matters—it’s how you use it. We have various tools available to our brokers—Trepp, RCM, CoStar, Real Capital Analytics CompStak and more—and we ensure that the brokers know how to use these resources to their advantage.
I’m also an institutional landlord, and I expect the building agents to use the technology resources out there. For example, if we lose a deal, I need them to know who we lost the deal to and why. With data such as CompStak’s, landlord agents have to be very smart and use the most accurate numbers. Estimating, guessing, or just plain making up information as a practice is likely to disappear. The real information is out there—someone is keeping a scorecard.
Andrew Farbman is the CEO of the Farbman Group. The Farbman Group is a full service commercial real estate company that operates over 25 million square feet throughout the Midwest. NAI Farbman a wholly owned subsidiary of the Farbman Group is the Detroit, MI branch of NAI Global.